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7. The ld. D.R. has vehemently supported the order of the authorities below and submitted that there is clear violation of the provision of section 269SS of the Act and therefore, the authorities below have rightly levied the penalty of Rs.14,64,000/- and prayed to dismiss the appeal of the assessee.

8. We have heard the rival submissions and perused the materials available on record. On going through the assessment order passed u/s 143(3) of the Act dated 30.4.2019, we take a note Sri Rakesh Ganapathy, Bangalore of the fact that there is no finding of AO regarding any violation of provision of section 269SS of the Act. The order of the assessment is very cryptic and only states that after carefully examining the details furnished by the assessee, the assessment is completed accepting the returned income. We also take a note of the fact that penalty proceedings u/s 271D of the Act were not initiated by AO on or before the completion of assessment proceedings. Thereafter to the surprise of the assessee, a notice u/s 274 r.w.s. 271D of the Act was issued to the assessee on 30.6.2022 by the ld. JCIT Range-4(3), Bangalore after a gap of more than 3 years. On going through the submissions made before the authorities below, we find that the assessee along with others has sold an ancestral property (agricultural property) situated at Plot No.135/5, Kodagu district, Virajpet Taluk, Balele Hobli, Kottagri village measuring 3.30 acres for a total sale consideration of Rs.29,28,000/- to agriculturists who are relatives (blood related) of the assessee. During the course of proceedings, the assessee explained his shares out of total sale consideration of Rs.29,28,000/- is Rs.14,64,000/- and his share of total sale consideration were received in cash. The assessee was under the honest and Bonafide belief that the agricultural property sold to his relatives who are agriculturists is not covered u/s 269SS of the Act. Further, the assessee was also under the honest and Bonafide belief that as the agricultural land is exempt u/s 2(14) of the Act, the sale proceeds received from the agricultural land is exempt and therefore, sale proceeds received from sale of such agricultural lands is also not covered u/s 269SS of the Act. We are of the considered opinion that assessee has received cash amounting to Rs.14,64,000/- towards the sale consideration for transfer of his agricultural land. In the instant case, the sale of property and consequent receipt of sale consideration in cash are not disputed by the either side. The assessee had only sold an ancestral property on a honest and Bonafide belief that same are not covered under the Sri Rakesh Ganapathy, Bangalore provisions of the section 269SS of the Act accepted the sale consideration in cash. On identical set of facts, the coordinate bench of ITAT, Bangalore in the case of Smt. Pushpalatha Vs. ITO reported in (2024) 165 taxmann.com 767 has held that where the assessee sold a property and received cash exceeding Rs.20,000/- as part of sale consideration having no knowledge of tax law there was reasonable cause as mandated u/s 273B of the Act for failure to comply with section 269SS of the Act. Hon'ble ITAT therefore, held that the penalty u/s 271D of the Act was not warranted and hence deleted. The relevant paragraph of the Hon'ble ITAT is reproduced below for ease of reference and record:

12. Further, we find that the AO could have initiated penalty proceedings only under section 269ST of the Act instead of section 269SS of the Act. Section 269ST Sri Rakesh Ganapathy, Bangalore of the Act places restriction on the assessee who receives an amount of Rs.2,00,000/- or more. In the instant case, the amount received as consideration for the transfer of immovable property would be covered under the rigor of section 269ST of the Act and not under section 269SS of the Act. On identical facts, the Chennai Bench of the Tribunal in the case of ITO Vs. Shri. R. Dhinagharan (HUF) (supra) had held that the consideration received on execution of the sale deed would not be covered under section 269SS of the Act but only an advance in relation to sale of property. The Chennai Bench of the Tribunal, after considering the relevant provisions of the Act and the Circular issued by the Board, had held as under :

It is further proposed to make consequential amendments in section 271D and section 271E to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively. These amendments will take effect from 1st day of June, 2015. The Notes on Clauses forming part of Finance Bill, 2015 highlighting the intention of the amendment is captured below:
Clause 66 of the Bill seeks to substitute section 269SS of the Income- tax Act relating to mode of taking or accepting certain loans and deposits. The existing provision contained in section 269SS provides that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such loan or deposit is twenty thousand rupees or more.

54.5 Consequential amendments in section 271D and section 271E, to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively, have also been made.

54.6 Applicability: These amendments have taken effect from 1st day of June, 2015.

From the above provisions, Memorandum explaining the intention of amendment by Finance Bill, 2015 including the definition of 'sum specified' brought in the Explanation to Section 269SS of the Act, it is clear that the intention for brining this provision was to curb the generation of black money in real estate prohibiting acceptance or repayment of advance in cash of Rs.20,000/- or more for any transaction in immovable property. This was explained by Hon'ble Finance Minister while placing the Finance Bill, 2015 in her budget speech highlighting the intention of the amendment that the amendment in Explanation to Section 269SS i.e., 'sum specified' means only applicable for advance receivable, whether as advance or otherwise means advance can be in any manner. Hence, this provision will not apply to the transaction that happens at the time of final payment at the time of registration of sale deed and payment is made before sub-registrar at the time of registration of property. In the present case before us, it is an admitted fact that all sale deeds were registered and cash payment was made at one go before the subregistrar at the time of registration of sale deeds of plots. Hence, in our view, there is no violation of provisions of section 269SS of the Act in the present case in the given facts and circumstances of the case and hence, penalty is not exigible in this case. Hence, we confirm the order of CIT(A) deleting the penalty but on entirely different ground i.e., on jurisdictional issue only. Accordingly, the appeal of the Revenue is dismissed."